Limelight Makes First Acquisition: Kiptronic

Limelight Networks today announced it’s acquired dynamic video and audio ad insertion startup Kiptronic. Terms of the deal weren’t disclosed. This is the CDN’s first-ever acquisition, and effectively brings it into the mobile content distribution and content monetization businesses.

An acquisition, in this economic climate?! Why now? “This is the time all our customers starting to make decisions about mobility,” explained Paul Alfieri, Limelight’s senior director of corporate communications.

Kiptronic, which had raised $9 million in funding, only recently got into mobile video publishing, launching earlier this month with its first customer, NBC. Kiptronic allows NBC to publish a single universal URL that adapts videos to whatever device they’re trying to be accessed on. (And ads are served dynamically using Kiptronic’s integration with DART.)

“The name of the game is changed from just having massive scalability to adding device optimization,” said Alfieri. He added Limelight would build Kiptronic’s “device detection intelligence” into its network.

As for monetization of media as it travels across the web and to different devices both online and offline — Kiptronic’s specialty — Alfieri admitted that it’s an entirely different business than being a CDN. He said Kiptronic will continue to work with other CDNs and customers who use other CDNs. “From the Limelight side, that’s a way for us to have a relationship with a large publisher even if they don’t select us for bit delivery.” CDN analyst Dan Rayburn says to expect more such “value-add” acquisitions from CDNs trying to diversify their revenues.

Kiptronic’s entire 15-employee team, including CEO Bill Loewenthal and founder and CTO Jonathan Cobb, will join Limelight and will remain at their own office in San Francisco at least through the end of the year. In addition to NBC, Kiptronic customers include NPR, FOX, The Guardian, Conde Nast and The Economist.

On a personal note, I remember way back in January 2007, just after we’d started this site, I wrote about (as an exclusive, I think) Kiptronic’s Series A funding, $4 million from Blueprint Ventures and Prism VentureWorks. The first comment was “Is it really this easy to get venture capital or is this just another bubble?” and for some reason that particular hater got to me. While terms of the deal weren’t announced, it’s cool to see that Kiptronic did end up doing something worth buying.